John Deere as corporate punching bag

[CYdTracked]

Have a friend that used to be an engineer at JD. A few years ago they were laying off engineers but part of that process is if another group had a spot one of the managers could essentially pull them out of a "bucket" and give them a different job. The catch though was if you took the reassignment and the pay was lower than your current position you had to take the pay cut to that salary level after a year. Apparently, he was in one of the layoff buckets and a former manager he worked for pulled him in for another job which was at a lower pay scale. He took the assignment but wound up leaving JD before the year was up to work for a competitor that had a more stable environment and better pay than this job is. Guessing he is not regretting the move with what is going on there now.

 

[jmax71]

A lot of great commentary in this thread from all sides. Thoughts and prayers to anyone laid off yesterday.

I can’t comment on JD specifically or how it has been strategically managed. When these large, specifically legacy, companies go through layoffs they are heavily publicized because it’s impacting so many people and the company’s brand is so established. But for these companies to be in a position where these moves get so much scrutiny, they’ve done something right over their history.

Just because a company is small or privately held doesn’t make it inherently better. My wife’s company, ~300 employees when she started, just went through its third round of layoffs in a little over a year.

And it’s not just “that’s capitalism for you!” Or “billionaires making profits!”. As an outsider looking in, it is almost exclusively due to a ******* CEO and management team making almost unfathomable strategic decisions he’s made since Covid. When these things happen it sucks. But the reasoning is usually a lot more nuanced than billionaires increasing their profits. And a good CEO IS worth their weight in gold

Great post! As a long term Deere employee, I’ve seen many things over the years and have had the opportunity to be a part of Union Leadership. In most cases I know or have a good idea about why we do what we do, and for most part.
All businesses are different and Deere has lots of challenges and headwinds other Companies don’t. Things like this layoff are much more complicated than to be explained away in some simple term like everyone’s favorite “corporate greed.”

 

[StateThrowdown]

Man, I worked at Deere 40+ years and never heard that rendition. It’s amazing to see all the comments posted from folks with little real knowledge of the Company.

Yeah, that sounds a lot more like Maytag than Deere.

 

[Mr.G.Spot]

Yeah, that sounds a lot more like Maytag than Deere.

Really? You are comparing Maytag to Deere? That has to be a joke.

 

[CyclonimusPrime]

Interest rates are still historically low.

You are correct in terms of absolute %. However, the base dollar amount you are financing has skyrocketed at an unprecedented rate. My home, for example, has nearly doubled in value over a roughly 6 year span. Historically, that base multiplier was much much smaller.

 

[StateThrowdown]

Really? You are comparing Maytag to Deere? That has to be a joke.

Not at all. I'm saying this quote specifically sounds more like what happened with Maytag retirees than Deere:

"True i know a few retired Deere workers, and they were told "put in your 30 years, and never work again." Full family insurance, copays of a dollar or two for the worker on name prescription drugs, full pension plan after your 30 years and generally the last 5 years, they allowed them to take easier jobs. The last year, they were given a 3 wheeled bike and there job was to deliver parts for the line.

Those days are now gone."

 

[CyDude16]

Great post! As a long term Deere employee, I’ve seen many things over the years and have had the opportunity to be a part of Union Leadership. In most cases I know or have a good idea about why we do what we do, and for most part.
All businesses are different and Deere has lots of challenges and headwinds other Companies don’t. Things like this layoff are much more complicated than to be explained away in some simple term like everyone’s favorite “corporate greed.”

But a lot of it is corporate greed. Got to get more stock buybacks in the billions!

 

[AgronAlum]

Great post! As a long term Deere employee, I’ve seen many things over the years and have had the opportunity to be a part of Union Leadership. In most cases I know or have a good idea about why we do what we do, and for most part.
All businesses are different and Deere has lots of challenges and headwinds other Companies don’t. Things like this layoff are much more complicated than to be explained away in some simple term like everyone’s favorite “corporate greed.”

Not really.

JD shareholders can't handle having slower quarter over quarter growth, so they're hacking away salaries instead of riding through it with employees. Then they'll inevitably start hiring back in a year or two when the market returns for new employee wages. Just like they have done previously and by evidence of yesterday, what they will continue to do.

Cut jobs. Expect the remaining workforce to absorb the cuts. Shareholders profit.

I'm not just directing this at JD either. This is what the US has let itself become because of ****** policy. An overworked and under paid workforce that has dwindling purchasing power. Every single dollar is being squeezed and horded by the chosen few. This is absolutely ******* the working class as both employees and consumers.

 

[NATEizKING]

You're still going to have a hard time beating JD salary and benefits in 2024. Recruiters contact me every week and the only company that I've seen that could match or beat them is Amazon.

 

[jmb]

You are correct in terms of absolute %. However, the base dollar amount you are financing has skyrocketed at an unprecedented rate. My home, for example, has nearly doubled in value over a roughly 6 year span. Historically, that base multiplier was much much smaller.

Your assessment is somewhat true. However; real wages have in fact gone up. So you have an asset that doubled in value, had little carry cost, and have realized increased wages. This is a win all the way around. Your example is pertinent to the newly employed, and first time home buyer. However; being new to the workforce has higher level entry pay.

 

[Dirtguy4CY]

You mean people aren't buying the $850,000 or more tractors/ combines anymore? Who would of thought....
John Deere dealers in our area have been starting to have a lot of auctions to offload equipment.
8RX tractors with very few hrs going for half cost at the moment.

As others have posted there is a lot more that goes into these layoffs but at the end of the day they are starting to price themselves out of the market for a good share of the customers.

Side comment - A lot of people have lost track of things at Deere. - Look up the New Chief Tractor Officer position person.. Interesting choice.

 

[Mr.G.Spot]

Not at all. I'm saying this quote specifically sounds more like what happened with Maytag retirees than Deere:

"True i know a few retired Deere workers, and they were told "put in your 30 years, and never work again." Full family insurance, copays of a dollar or two for the worker on name prescription drugs, full pension plan after your 30 years and generally the last 5 years, they allowed them to take easier jobs. The last year, they were given a 3 wheeled bike and there job was to deliver parts for the line.

Those days are now gone."

Thanks for clarification.

 

[Turn2]

You mean people aren't buying the $850,000 or more tractors/ combines anymore? Who would of thought....
John Deere dealers in our area have been starting to have a lot of auctions to offload equipment.
8RX tractors with very few hrs going for half cost at the moment.

As others have posted there is a lot more that goes into these layoffs but at the end of the day they are starting to price themselves out of the market for a good share of the customers.

Side comment - A lot of people have lost track of things at Deere. - Look up the New Chief Tractor Officer position person.. Interesting choice.

I take it this guy was NOT laid off?

 

[1SEIACLONE]

Net income for JD over the past five years.

2024 $7 Billion projected
2023 $10.1 Billion
2022 $ 7.13 Billion
2021 $ 5.93 Billion
2020 $ 2.75 Billion
2019 $ 3.23 Billion.

So the numbers are projected to drop from 2023, but even at the projected number of $7 Billion this year, it would be 3rd highest net income in the companies history. Sound like another, have to keep the stock price growing more than they are losing money, they are just making less than they hoped they would make, but they are NOT losing money.

John Deere net income 2024| Statista

John Deere's net income in 2024 amounted to 7.1 billion U.S.

www.statista.com

Deere Reports Second Quarter Net Income of $2.370 Billion

MOLINE, Illinois (May 16, 2024) — Deere & Company reported net income of $2.370 billion for the second quarter ended April 28, 2024, or $8.53 per share, compared with net income of $2.860 billion, or $9.65 per share, for the quarter ended April 30, 2023

www.deere.com

 

[ScottyP]

Do I need to throw my kid's John Deere toys and clothes in the dumpster in protest?

 

[mustangcy]

True i know a few retired Deere workers, and they were told "put in your 30 years, and never work again." Full family insurance, copays of a dollar or two for the worker on name prescription drugs, full pension plan after your 30 years and generally the last 5 years, they allowed them to take easier jobs. The last year, they were given a 3 wheeled bike and there job was to deliver parts for the line.

Those days are now gone.

My father in law retired with 30 years at Deere, I want to say around 2018. He indeed had free healthcare for a majority of his time and his copay was $10 (we just talked about this recently). He was a painter for about 25 years and yeah, his last 5 he got to go put on decals. So most of whats said here is true, at least at my FIL plant. He farms now but he does not have to, he makes enough through his pension that if he wanted to stop farming he absolutely could.

 

[1SEIACLONE]

My father in law retired with 30 years at Deere, I want to say around 2018. He indeed had free healthcare for a majority of his time and his copay was $10 (we just talked about this recently). He was a painter for about 25 years and yeah, his last 5 he got to go put on decals. So most of whats said here is true, at least at my FIL plant. He farms now but he does not have to, he makes enough through his pension that if he wanted to stop farming he absolutely could.

The benefits and insurance for those that started working at Deere in the 80's and 90's was unbelievable compared to what is offered today. Most worked their 30 years and retired, some stayed longer because they had started young and still wanted something to do.

I taught with a gal once, and asked her why she did not take the school insurance, which would be free for her. Her reply "my husband works are JD in Ottumwa, and we pay little to nothing for insurance." When I told her, she would be double covered if anything happened to her, she could cared less, they didn't need it and figured they were saving the school the money.

 

[CyclonimusPrime]

My father in law retired with 30 years at Deere, I want to say around 2018. He indeed had free healthcare for a majority of his time and his copay was $10 (we just talked about this recently). He was a painter for about 25 years and yeah, his last 5 he got to go put on decals. So most of whats said here is true, at least at my FIL plant. He farms now but he does not have to, he makes enough through his pension that if he wanted to stop farming he absolutely could.

Putting on decals on a Deere is delicate work and takes someone with great skill to do it fast and accurately. Your father-in-law must have be very handy.

 

[TitanClone]

It's ridiculous to talk about individual people's Starbucks purchase or how to eat more chicken when you've got these corps making billions. The problem isn't avocado toast here.

This made me chuckle. Cerner's last CEO before the Oracle buyout (he's still on board as Chairman of Oracle Health whatever the hell that means, we never hear from him) was a California guy transplanted to KC for a couple years. I think he was the CEO of UCLA Hospital prior, comes in day one and is talking about how him and his wife love KC so far, mentions the area he and his wife settled in which only has 7 figure houses, then randomly mentioned how he had to have his avocado toast every morning so if anyone has any good restaurant recommendations let him know.

Everyone knew the CEO prior to him was brought in to bump the stock price (layoffs) to prep for sale, then new guy was brought in because he's actually a doctor with extensive executive history in hospital systems to be the true face of the company when they went to market. 2 puppets to the board who pocketed millions doing jack s***.

 

[mustangcy]

Putting on decals on a Deere is delicate work and takes someone with great skill to do it fast and accurately. Your father-in-law must have be very handy.

Yes - he is handy, and a hard worker. But it also isn't anywhere near as physically challenging as the paint booth. So the original post about moving jobs the last few years due to age and physicality is true, at least in his case.